Beijing-based financial company Tongchuangjiuding Investment Management Group (Jiuding) is considering offloading a stake of 20% to 40% in Hong Kong insurer FTLife Insurance.

Jiuding, which is under investigation on the Chinese mainland for suspected violations of securities laws, is considering selling the stake because the industry watchdog in Hong Kong has questioned whether the company is eligible to own 100% of the insurer, the financial portal Caixin reports citing sources.

In May 2016, Jiuding acquired 100% of FTLife for nearly HK$10.7 billion (US$1.36 billion) from Ageas, a Brussels-based insurance firm created to succeed the collapsed Belgian-Dutch group Fortis.

The Hong Kong Insurance Authority reserves the right to withhold authorisation if it deems that an organisation or individual who is a director or controller of the company is not a “fit and proper person”. At this stage, it is unclear whether Jiuding will be allowed to retain control of the Hong Kong insurer.

Jiuding—listed on China’s largest over-the-counter stock trading platform—announced in late March that it was under investigation by the China Securities Regulatory Commission for possible violations such as engaging in market manipulation, illicit practices in previous share placement deals, and unauthorised raising of funds from public investors.

The investigation into Jiuding is likely part of a government crackdown on misconduct by private financial conglomerates, as authorities seek to rein in risks from credit-fueled overseas expansion by some companies. At the same time, it aims to tighten control over the ownership of financial institutions to stop shareholders from building up hidden stakes and using them to influence operations.